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What Are Two Types Of Value-Based Smart Bidding Strategies?

When it comes to Google Ads, getting the best value for every dollar spent is essential. Smart Bidding strategies help advertisers achieve specific goals by using machine learning to optimise bids. Among Smart Bidding options, value-based strategies are especially useful for businesses that want to focus on revenue rather than just conversions. Today, let’s look at two value-based Smart Bidding strategies you should know about Maximise Conversion Value and Target ROAS.

1. Maximise Conversion Value

Maximise Conversion Value

Maximising conversion value is all about aiming for the highest return possible from your ad spend. This strategy is designed to help you get the most valuable conversions within your budget, whether those conversions are purchases, leads, or other actions that matter to your business.

Here’s how it works: When you select Maximise Conversion Value, Google’s algorithm analyses your campaign data and adjusts your bids in real-time. The goal is to drive as much total value as possible from the conversions you care about, regardless of the individual cost per action. So, if a user is more likely to convert in a way that generates higher value (like buying a high-ticket product), Google may bid higher to win that auction.

This strategy works well for businesses that don’t necessarily need to meet a specific return on ad spend (ROAS) target but instead want to get the highest possible value out of their budget. If you have a set budget and want to maximise the returns, Maximise Conversion Value can be a great choice.

2. Maximise Conversion Value with Target ROAS (Return on Ad Spend)

Maximise Conversion Value with Target ROAS (Return on Ad Spend)

While Maximise Conversion Value is focused on total returns, Target ROAS takes things a step further by setting a specific return goal for every dollar spent. With Target ROAS, you’re not only looking to maximise conversion value but also aiming for a set ROAS percentage.

Here’s an example: Imagine you set a Target ROAS of 400%. Google will then optimise your bids to try and achieve at least $4 in revenue for every $1 spent on ads. This strategy is ideal if you have a clear return goal in mind and want to make sure your ad spend meets that target. Businesses with varying product prices or industries with different profit margins often benefit from Target ROAS because it allows for more control over profitability.

To make the most out of Target ROAS, it’s important to have a good amount of conversion data for Google’s algorithm to learn from. If you have a history of conversions and know your profit margins well, this strategy can help you hit your revenue goals while staying within your ad spend limits.

Choosing the Right Value-Based Smart Bidding Strategy

Value-Based Smart Bidding Strategy

Both Maximise Conversion Value and Target ROAS are effective ways to boost the value of your campaigns, but each has its strengths. Choose Maximise Conversion Value if you simply want to get the most out of your budget without worrying about specific profit margins. On the other hand, if you have a clear revenue target in mind, Target ROAS can help ensure that each dollar spent brings back the desired return.

In the end, both strategies use Google’s machine learning capabilities to help advertisers make smarter decisions, bringing in more valuable conversions. Selecting the right strategy for your business goals can lead to better ad performance and more efficient ad spending.

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Original Source: https://www.sfdigital.co.uk/blog/what-are-two-types-of-value-based-smart-bidding-strategies/

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